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Accounting Standards Not Upended by President Trump’s Two-for-One Regulation Cut

President Trump will likely not be cutting accounting
regulations, and there is no indication that any pending accounting standard
updates will be changed in his administration.

President Trump signed an executive order on January 30,
2017, that requires two executive branch regulations to be cut for every new
one created. He cited the executive order today, February 16, 2017, in a live
press conference.

From today’s press conference President Trump appears more
interested in what he describes as excessive regulations where “we do not need
four, five or six regulations saying the same thing.” He sees the EPA for
example, as hindering corporations with unnecessary and burdensome regulations.
He said we will have “safe regulations” adding “companies will be denied
quickly so they do not need to spend tens of millions of dollars to be denied
years later.” Whether or not President Trump can accomplish that objective is
the scope of another article.

Applies to Every
Regulation?

Upon release of the executive order, but before the press
conference, Tom McGarity, Law Professor at the University of Texas, was quoted
by the Washington Post as saying that the President’s two-for-one regulation
scrap “applies to every regulation. It is not limited to major regulations.” Naturally,
accountants are wondering if some financial reporting regulations will be
altered or entirely scrapped.

On January 31, 2017, PWC conducted a live quarterly webcast
on Governance Insights to an audience consisting mainly of corporate
executives, auditors, controllers, tax professionals and others. During a
Q&A one audience member asked if there was any indication that President
Trump would scrap accounting standards. A PWC Partner said “no.”

Brexit, Trump
Presidency.

Before President Trump assumed his position, accountants
were questioning how their profession may change. On December 6, 2016, in the
Journal of Accountancy, Ken Tysiac posted an article “Will Brexit, Trump affect
global accounting standards,” and he posed the question if these two turn of
events will “result in a retreat from global accounting standards”?

Many people have compared the similarities in the election
of President Trump to Britain’s vote to leave the European Union - aka “Brexit.”
Brexit occurred in June 2016, more than five months before President Trump’s
nomination. If there are parallels to be drawn in the realm of financial
reporting regulation, perhaps we can look at how Brexit has affected the
accounting regulations in Britain, or how the International Accounting
Standards Board (IASB) is dealing with their accounting standards. During the
AICPA National Conference on Current SEC and PCAOB Developments in December
2016, IASB Chairman, Hans Hoogervorst said “it is too early to tell, but for
now we see no immediate consequences,” adding that Britain continues to show support
for the continued use of IFRS.

One can draw a similar conclusion with the regulations for US
accounting standards. Ken Tysiac’s Post goes on to mention that Hans
Hoogervorst “believes President Trump has other concerns that are more pressing
than global accounting standards.”

During the PWC live webcast, the speakers, trying to gauge
audience views, presented several surveys to the attendees. PWC summarized the
respondent’s answers as:

They believe that the most exciting aspect of a
Trump presidency is tax reform. Respondents expect about one year for major tax
changes to be implemented;

Deregulation is their second favorite area of
potential reform. But the President’s exact policies and dates are as yet unknown,
they said;

Dodd Frank changes are likely, but an entire repeal of the law is
unlikely; and

Accounting standards are not likely getting
rolled back.

So it seems that accountants can relax, or at least revert back to their normal worries about quarterly reporting, and such. They are fortunately unfortunate in that they remain safely removed from their regulations being scrapped.

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